Entrepreneurship

Dean Kamen, one of the most innovative inventors in recent times, has designed breakthrough wheelchairs that can go up and down stairs and is the man behind the two wheeled Segway electric scooter.

Kamen's newest venture is two small washing machine-size units for use in small rural communities in developing countries. One unit takes any kind of dirty water and turns it into clean water. Communities with an affordable source of clean water can avoid a whole host of debilitating diseases.

The other machine burns cow dung (very common in most areas of the world) and generates a kilowatt of electricity--continuously. It does not sound like much power, but if you also give that community some LED lightbulbs, you change the way the community lives. A kilowatt of power will also charge cellphones, Ethernet networks, and laptops.

The problem with conventional approaches to power and telecom is the grid. You need an expensive electric and telecom grid to get power and communications into rural areas. By moving the power (and clean water) closer to users, the grid is eliminated. Kamen's approach turns fifty years of largely failed development strategies on its head. And its likely to work if given a chance.

Big, expensive regional and countrywide projects like dams make millions for the companies that get the contracts to build them, but they have rarely had the expected benefits. Just the way the Internet levels the playing field and gives everyone a more equal opportunity, so do Kamen's machines.

Tom Dorr is one of the most knowledgeable people in the Federal government when it comes to rural issues. At a seminar in Iowa, Dorr discussed a key advantage that he thinks rural communities have when attracting entrepreneurs--quality of life (hat tip to EDPro).

Dorr is under secretary of rural development at the USDA, and he cited several factors that are becoming a major influence for relocating entrepreneurs, including peace and quiet, short commutes to work, good schools, and lower taxes. The "good schools" is an issue rural communities need to study carefully. As family needs drive business relocation, local schools need to have high graduation rates, low drop out rates, and good college prep and advanced placement classes.

Yes, that's right. Schools are an economic development issue. So does your ED strategy include goals and objectives for local schools? If not, why not?

Two statewide tech councils in Maryland have merged so that they can provide a clearer voice for technology businesses in the state.

Tech councils are an interesting response to the declining influence of Chambers of Commerce, which for the most part, have failed to re-think their mission and goals as the economy of local communities has changed. One problem with tech councils is that it further exacerbates the Chamber problem--forward thinking tech companies are more likely to belong to the local tech council than the local Chamber, but the two groups have overlapping goals. So the voice of both is somewhat diluted.

In some states, there are regional tech councils (e.g. Virginia), which has had mixed success. It's better from a local company perspective, perhaps, since a regional tech council is going to be more focused on local business needs. But if there are multiple councils, it is hard to get the entire tech center to speak with one voice. In Virginia, tech discussions at the state level are dominated by northern Virginia tech interests.

Maryland businesses are the right track by merging.

Frank Maguire is the cofounder of FedEx, and this article reports on a recent speech he gave about passion, success, and the determination to make things work. Among his comments was this statement.

"There's a light in each one of you and it's bigger than you ever thought and it's on your side," he said. "Turn on your light. You can do it, regardless of your circumstances."

Maguire's comments apply equally well to communities. We are in a period of rapid and often troubling change, fraught with both peril and opportunity. Our communities face a variety of challenges, and I think that the communities that want to be around in twenty, or thirty, or fifty years need the kind of passion, devotion, and commitment that Maguire says made the difference in his life. Particularly in economic development, it's not enough to be mediocre.

That worked when the competition was the mediocre county next door, but when the competition is from communities, provinces, and countries across the globe, mediocre is not good enough. Communities need to find their passion, hire the best people they can find, and stick to it until they are successful.

On another mailing list, I heard about a T-Mobile Web page that would tell you what kind of signal you are likely to get at a given street address in the U.S. Because U.S. Cellular offers nothing but bottom of the bin cellphones (they are not big enough to get deals to sell phones like the Treo 650), I thought I'd check T-Mobile.

The company has never had coverage in Blacksburg, but I thought I'd try again, since I have not checked with them lately. So I went to the page, typed in my street address, city, state, and zip code, pressed the button, and voila.

I got back a message saying "Input zip code is invalid."

Wow. That's interesting. Either T-Mobile is trying to tell me I live in an "invalid" place, or there is a bug in their code, or it's a really awful way of saying they have no coverage in my area.

Pick any one of those three choices, and you get to the same conclusion--somebody screwed up, either by not testing it adequately and/or by failing utterly to do a basic software ergonomics review to make sure the "error" messages made sense.

My guess: This little app was outsourced to a software shop in India, which did a bang up job of banging out the code cheaply and producing a slick little application. But you get what you pay for. Outsourced contractors rarely care much about little details like this; they are under the gun to get the work done quickly and cheaply for the client, and so they don't have the luxury of dotting the i's and crossing the t's.

At the same time that we see big companies getting bigger by relentless costcutting and globalization of production, why is there a parallel rise in small, entreprenuerial enterprises? Because the small entrepreneur has more skin in the game--he or she has to produce high quality stuff to be competitive. A two hundred person coding shop in India just has to get the next job. It's not either/or here....both have their place, and both can provide useful services.

One of the best ways to create new jobs in your region is to make sure the businesses that are already in the community have access to good advice, including advice and guidance on technical matters.

The traditional role of the economic developer in the Manufacturing Economy was to recruit jobs from other parts of the country. But that has not been an effective primary strategy for many years. In a global economy, many traditional manufacturing jobs have moved offshore, and no amount of tax incentives are going to change that.

A diversified economic development strategy would put more time and resources into helping existing businesses grow. And there is plenty of simple and effective things that can be done. For example, I still find many businesses have poorly designed Web sites. Why not use some ED funds to pay for Web site critiques and reviews of business Web sites? This could be done on a 50% match basis to ensure that the businesses are likely to take the advice seriously.

As an example of how bad things could be, I just found a business with this statement on their "Contact Us" page:

To email us, order a free catalog, check on an order, etc., please call 1-800-829-xxxx.

I'm not making this up--to email the company, you have to call them first! Here is a business that has apparently been asleep for the past ten years, and still does not recognize that current and potential customers may want to email the company. I find that the majority of small businesses are still not taking the Web seriously, largely because they simply don't know what to do.

Part of the problem is not their fault. Too many businesses have been burned badly with bad advice. There are basically two ways to get help with a business Web site.

• You can go to a Web design shop. These outfits are often expert at building the Web site, but don't always have in-house expertise to help with marketing and business integration issues. So businesses end up with costly Web sites that don't actually have any impact on the business.

There is the old joke that goes like this:

"There are two kinds of people in the world--those that divide people into two groups, and those that don't."

At the risk of self parody, there are two kinds of people in the world (and I'm broadly overgeneralizing, of course)--those that use eBay and those that don't.

For those that don't, the eBay phenomenon is a bit of mystery. From a certain distance, EBay is cluttered with junk, trivia, excess, and silliness. But it also is a terrific business transaction mechanism, for both formal and informal business.

I just bought a part for my breadmaker. The manufacturer has been out of business for four years, and parts are no longer available through "normal" channels--that is to say, the Manufacturing Economy manufacturer--distributor--dealer supply chain.

But I found the part I needed for $9 (new cost was $15 when it was available) from a guy in Nebraska whose machine had burned up. Instead of throwing it in the landfill, he's selling usable parts from it and making a few extra bucks. It's not only reducing the amount of waste going into landfills (parts of his machine and all of mine), he's profiting from it, and I'm able to keep a perfectly good machine working.

It's amazing when you think about it. A scant ten years ago, the notion of linking a buyer for a very obscure machine part in Virginia with a seller in Nebraska was inconceivable. Today, we take it for granted.

Many small businesses are now using eBay as a strategic part of their business, putting both normal stock and overstocks there for sale. It's a cheap and easy mail order strategy that has virtually no downside.

Does your region's economic development strategy include workshops to help businesspeople learn how to use eBay? I bet not, and business growth opportunities are being missed.

The Hidden Power of Social Networks (by Rob Cross and Andrew Parker) is the Book of the Month.

In the Manufacturing Economy (1850 to 1950), where you were located mattered because stuff was heavy. Being near an airport, a highway, or a river was a key part of an economic development strategy. In the Information Economy (1950 to 2000), what you had mattered. What kind of technology you had--computers, networking equipment--often created a competitive edge, especially in the last ten years of that era.

In the Knowledge Economy, many goods and services are weightless--software, music, and videos can be delivered over the Internet, among many other services and products. Location is less important, and if you don't already the computers and networking stuff, your business is dead or nearly so. So what counts in the Knowledge Economy?

In the Knowledge Economy, we are awash in an ocean of information. We can't possibly absorb all of it. It flows into our computers in an ever-increasing torrent. It is now impossible to master any field of study; there is simply too much to know. Collaboration is fast becoming not just a nice thing to do, but a business and organizational necessity. To survive and prosper, you have to have a trusted network of associates, peers, and colleagues to whom you can direct questions and get answers.

In the Knowledge Economy, who you know is what matters, not where you are or what kind of technology you have.

Having said that, developing and maintaining a network of reliable colleagues is hard work--but with a big payoff. This book delves into why these networks are effective, how to set them up, and how to maintain them. It is thoughtful and well-written, and mildly academic in style, but the chapters are short and to the point. Reading this book won't put you to sleep. I think it is well worth a read.

For past Books of the Month, visit this page.

We hear continually about the "problems" of the airlines. I had a few problems with an airline myself yesterday as thunderstorms buffeted the East Coast and snarled up traffic.

I was trying to leave Manchester, Vermont and get back to Roanoke, Virginia. Under normal conditions, the two leg journey (through Dulles in D.C.) takes just four hours. Yesterday, it took ten hours, mostly for no good reason.

Knowing the weather was causing problems, I showed up at the Manchester airport about four hours before my scheduled flight. At the ticket counter, United refused to book me on an earlier flight unless I paid $100 extra. I persisted, and I was told I could try standby for no extra fee, so I opted for that. I went through security and went up to the gate where the earlier flight was leaving, and discovered that the noon flight to Dulles was just getting loaded (four hours late...a bad sign).

I tried getting on, but the gate attendants refused to talk to several of us on later flights that wanted to get out. Talking among ourselves, we decided it was a lost cause, and a couple businesspeople left to go get some dinner. I lingered at the counter for another minute, and a different gate attendant walked up and asked if anyone else needed to go to D.C. I stepped up, and she said, "Oh, you need to go on this flight, because your flight is canceled." Huh? I'd been at this gate for nearly an hour, and no announcement had been made. When did they plan to tell me? She changed my ticket and put me on the plane, which had at least a dozen empty seats. They held the plane a bit longer, and filled all the seats. So far, so good, I figured...I'd get home tonight.

When I got to Dulles, I tried to repeat that. I went to the gate where an earlier Roanoke flight (late) was leaving. They had just started boarding, and I counted only about fifteen people getting on a fifty seat regional jet. Several of us tried to get rebooked on the flight, but the gate attendants ignored us. Finally the flight left, and I was able to get one of them to direct me to the gate where my flight was leaving.

The Thursday New York Times had a fascinating article on the op-ed page (page A27) that is worth chasing down if you can snag a copy. It's a graphic and a couple of paragraphs on data from the Federal Reserve Bank about where the jobs are and are not. The bar graph really helps clarify and make understandable the changes we have been seeing in the job market over the past several years. It's no surprise that in the "Manual Dexterity," "Muscle Power," and "Formulaic Intelligence" categories, steep declines are being registered (Formulaic Intelligence includes jobs like bookkeepers, clerks, and typists--work that technology is shifting).

Steep increases have been registered in "People Skills and Emotional Intelligence" (financial services sales, nurses, recreation workers, lawyers), "Imagination and Creativity" (actors, architects, designers, photographers, cosmetologists), and "Analytic Reasoning" (legal assistants, scientists, engineers).

The authors, who include the chief economist at the Federal Reserve, note that Americans have, many times in the past, adjusted to changing economic conditions and have learned new skills. They also note that whenever these shifts take place, in the long run, people end up with better jobs that pay more. Finally, they note that "trying to preserve existing jobs will prove futile."

Communities need to learn what the jobs of the future are and make sure the training is available for them. The best thing about this--many of these jobs do NOT require four years of college. Two year colleges and trade institutes can pro